How to Lease the Car of Your Dreams with No Money Down

How to Lease the Car of Your Dreams with No Money Down

by James Hamel

Do you have an eye on a sporty BMW 335i but just can’t seem to scrape together the cash for the initial down payment? Many luxury car companies are offering very attractive monthly lease rates on their new models nowadays but that still means you usually have to come up with a huge wad of cash at the start of the deal. For example, BMW is offering a $469 a month lease on the 335i but you still need to have about $5,000 when you initially sign the contract.

Granted, there are $0 down payment lease offers out there at the moment on some new cars but that doesn’t take into account fixed fees like security deposits and acquisition costs. But there is an alternative.

Did you know that at any time during a lease the lessee can have another person take over payments? While most manufacturers charge a small transfer fee you can always try and get the initial lessee to pay that cost. (Transfer fees vary widely—Mercedes and Land Rover seem to charge the most while Ford Motor Company vehicles only require a $75 transfer fee.)

Usually there is just one simple form to fill out for the manufacturer’s leasing arm and then presto! The new owner just keeps paying your monthly lease payment each month until the vehicle needs to be returned.

Finding the Best Lease to Assume—The quickest way to find the best lease assumption deal for you is to turn to the internet. Sites like Leasetrader.com, Swapalease.com and Leasetrade.com all have thousands of listings made by various private parties looking to offload their lease. There are also other sites but most of them work by having the people who advertise on the site pay while “lease assumers” (meaning you) enjoy the benefits at no cost.

Luxury cars are heavily represented in the listings as many of these lessees have either lost their jobs or just can’t afford the payments anymore. If you feel like this is “taking advantage” of someone else’s misfortune, imagine how unfortunate it will be to this other person’s credit rating when their car, truck or SUV gets repossessed. In fact, if you assume someone else’s lease you are really doing what amounts to a public service.

What You Need to Know—For example, ads displayed on LeaseTrader.com for individual vehicle leases show all the information you need to know to understand what you are getting into. For example, it lists how many months are left on the lease, the exact monthly payment, which firm the lease is through (manufacturer leasing companies are the safest bets), the exact option specification, accident history, maintenance history, cost to buy the vehicle at the end of the lease, photos and where the vehicle is located.

Many people also use lease assumption sites like this to look for a new car when they are moving. But if you aren’t going anywhere anytime soon these websites allow you to search for vehicles in your local area. For example, if you want to assume a lease on a Mercedes ML350 SUV and live in Denver you probably don’t want to look at one that is located in Delaware. Before starting your search, decide how far it is you are willing to drive to pick up the vehicle you intend to lease.

Don’t Be Stupid—These websites are meant to connect you with individuals looking to offload their leased vehicles but none claim to have any proof that these people are in any way honest. If it sounds too good to be true it probably is. And as always, don’t pick up the vehicle until all of the paperwork has gone through with the leasing company. You don’t want to be driving around in a vehicle that is still under someone else’s name.

When you assume a lease realize you will then be liable for any damage that the previous lessee did to the vehicle. Make sure all bodywork repairs are complete before assuming any lease. Also check that the tires are not bald because when you turn a leased car in with bald tires the leasing company will charge you (and not the previous lessee) for new ones. Also look out for windshield cracks, burns in carpet and seats, scrapes on alloy wheels and ask for proof of all servicing.

Lastly, never lease a car that is already over the mileage limits. Usually leases give you 12-15k drivable miles a year. Depending on the contract you can pay anywhere from a penny to ten cents for every mile over that predetermined mileage limit when you turn in the car. Sometimes you can get that huge bill waived if you lease a new car from the same automaker at the time of lease return but that is not guaranteed.

Would This Work For Me?—When you attempt to assume a lease do realize that if you have a credit score equivalent to your age that most leasing companies will probably turn you down. You don’t have to have perfect credit, however, as many lease companies see lease assumption as a way to still get paid on a previous contract. When a lease company has to repossess a car they always lose money so lease assumption is their preferred route.

When you “assume” a lease you are leasing what is now essentially a “used” car. Even so, these vehicles are pretty new and should probably still be under warranty. In addition to the monthly payment you must remember that even leased cars must be regularly serviced per manufacturer’s requirements. So before you lease, say, a Range Rover at a super-low rate be sure that you can afford to maintain this vehicle. Websites like Edmunds.com and Automotive.com all offer “real cost of ownership” listings (including service costs) for various models on their websites.

Which One Should I Pick?—Part of the fun of lease assumption is the fact that people who get “bored quickly” with their cars have a way to inexpensively feed their automotive addiction. It is also quite a bit of fun to be able to see what sort of lease deals people are signing. On Leasetrader.com there was a 2007 Mercedes ML350 that was $970/month while most other ML350 leases (equipped in a nearly identical fashion) on the site were closer to $550/month. Someone got ripped off.

But lease assumption really works best when an interested party knows exactly the car he or she wants. That way you can tell the search engines on these websites to look for an Audi A4 sedan and then all you have to do is check the listings for the best lease assumption deal. Finding the best deal on a lease has never been easier or more fun.